I’ve been trying to get my head round this economic crisis we have.
If I go to the New Fairlop Oak and find myself financially embarrassed I might borrow £10 from my mate John to buy a round of drinks. This would leave me with a liability which I would have to meet from somewhere else, like the grand children’s pocket money. It would leave John with a verbal credit note from me.
He could, of course, pass that credit onto someone else in exchange for cash or goods. This might involve a discount depending upon the risk of default. Meanwhile the £10 is in the till behind the bar. It hasn’t disappeared into thin air. It will be used to pay the staff and overheads and replenish the stock.
So, if all the rich countries on this lonely lump of rock we call home, 600 light years from anything remotely similar, are up to their necks in debt, to whom are those debts owed and where is the cash they have spent? It must be in a till behind a bar somewhere waiting to be used in the global economy? Right?
Answers in the comments please.
Now, has anything changed as a result of Mr Cameron’s handbag moment? Er, No! Did Mr Brown end Boom and Bust? Er, No! Are we putting the very people who caused the problem in charge of fixing it? Er, Yes! Would Mr Brown, Mr Miliband or Mr Clegg have done any different? Er. No! Is there a Rizla between the ConTories, the LabTories or the LibDemTories? Er, No!
Here’s a selection of commentary to confuse you even more: … (full text).